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The Keynesian or Pseudo-Keynesian Growth Discount

Updated May 6, 2011 12:01 a.m. ET

Your editorial "The Keynesian Growth Discount" (April 29) might better be titled, "The Pseudo-Keynesian Growth Discount." An authentically Keynesian stimulus depends on a pre-crisis budget surplus and conservative budgeting during a growth cycle. A stimulus launched from a 1997–sized budget surplus, for instance, might have a notable effect. Coming off a 2007-sized deficit, it becomes a study in futility, a stopgap at best. Unfortunately, Keynes did not anticipate his great theory being corrupted into politicians' Keynesianism, which translates as "permanent stimulus."